Border disease (BD), the result of a congenital infection of sheep, is caused by a virus in the genus Pestivirus and the family Togaviridae. Abortion or congenitally affected lambs may result when pregnant ewes, in their first trimester, develop a primary infection with BD virus. This noncytopathic virus which is antigenically related to hog cholera and bovine diarrhea viruses, causes congenital malformations of many systems of the fetal lamb. Affected lambs are small, weak, have long straight fleece with abnormal pigment, have cerebellar tremors and a low survival rate. The only histopathological lesions reported in this disease are a reduction in CNS myelin (dysmyelination) and glial proliferation in the new born lambs. In our present work we have studied lambs congenitally infected with BD virus and sheep exposed to BD virus as adults and studied them for one year to determine the pathogenesis of a congenital exposure compared to an adult exposure to the virus. Persistent BD virus was isolated in tissue culture and detected by immunofluorescence (FA) from the peripheral white blood cells, urine and CSF of the lambs with congenital BD for up to one year of age. These animals had no detectable serum neutralizing antibody response for the same time period. BD viral antigen was also detected by FA in many CNS tissues of these lambs with BD. In comparison, sheep infected with BD virus as adults had normal antibody levels against the virus, and no detectable virus isolated from similar tissues. A reduction in myelin content (dysmelination) and glial proliferation in the CNS and microencephaly were noted in the lambs with congenital BD and these lesions appeared to remain the same over a 12 month period. This virus in sheep is an excellent animal model for the study of microencephaly and dysmyelination in humans and as a tool for investigating CNS cell migration and maturation and for determining mechanisms for viral invasion and persistence.